Creating a financially secure life is one of the most challenging things. To get started, you need to understand where you are and where you want to get to.
In addition, you are your own boss, meaning that you are also responsible for finding the right financial route to get you to where you want to be. You also have to ensure that you stick by the chosen route without veering off.
This can be a challenge, but how do you handle this if you are an actor? Actors tend to have inconsistent incomes, making financial management even more difficult. That notwithstanding, here is a guide to financial planning for budding actors;
Get a Cash Management Account
Also known as CMAs, Cash Management Accounts offer account holders an alternative to the normal savings and checking account. With this account, you can make payments and manage your money while at the same time earning some interest.
Different institutions offer different types of cash management accounts. However, most of them come with either debit cards, checkbooks, or even both. One of the benefits of these accounts is that they charge minimal fees for banking services.
You will be able to safely keep your money, manage it, make payments, and earn interest with a cash management account. You will also enjoy all the services offered by traditional banks.
Budgeting
As discussed above, a bigger percentage of actors do not earn a lot of money. In addition, their income tends to be inconsistent. This means that it is very important for them to understand where each of their cents is going.
The first step in budgeting involves writing down everything you buy or any bill you pay for a month. This should include everything, even a $1 purchase. At the end of the month, you will be able to see where your money has been going and what you need to change.
After that, you need to come up with a plan for your spending for the next month. This might be challenging but try as much as you can to follow the plan. Keep adjusting the plan after every month to come up with one that works and helps you save money.
Savings
Sticking to a monthly spending plan might prove to be a huge task, especially for actors who do not have a consistent income. So how can they stick to a budget when they do not have a consistent income? This is where savings come in.
When sticking to your spending plan, you will realize that you are left with extra money at the end of the month. This money should go to your savings account. Depending on your financial institution, you can get a savings account tailored to meet your requirements.
By doing this, it will be easy for you to stick to a spending plan even when you do not have a consistent income since you will always have money. You can even save more money when acting somewhere where everything is taken care of for you.
Tax Management
This is one of the most confusing things, not only among actors but everyone else without a financial background. Tax laws will change when you think you are getting to understand the existing ones, making everything complicated.
If you have enough money to hire an accountant, then this should be the least of your worries. However, if you don’t, look for accountants who would be willing to donate some of their time to help other people.
The bottom line is to make sure that you are ready for the tax season and to avoid tax scams. You do not want to wake up at the end of a financial year with a huge fine because you owe the government money.
Retirement
No matter how old or where you are in your career, you need to plan for your retirement. This is part of financial planning, whether we like it or not. As an actor, you might get somewhere in your career where you cannot act anymore.
Fortunately, a retirement account is one of the easiest accounts you can open. Since most actors work as freelancers, they do not enjoy the 402(k) benefits. They can, however, open a retirement account with as little as $5.
A retirement account will earn you interest. At the end of the day, you will be ready for retirement and can live without having to worry about bill payments.
Following this guide, you will be able to achieve financial freedom as an actor and can live without having to worry about what tomorrow has to offer.